Over the years, Ethereum has been popular for being the major decentralized network that hosts various applications. It is a secure smart-contract chain in the blockchain ecosystem. We have witnessed the possibility of leveraging Ethereum to host other projects. It is the backbone for sustaining projects such as decentralized finance (DeFi) and non-fungible tokens (NFTs).
Despite all these, the increasing demands for using Ethereum stretch its scalability to enhance its performance to accommodate other projects, including gaming and social media. Ethereum is home to crypto-assets trading and lending in its early stage. Likewise, it is the foremost choice for individuals engaging in digital art.
Meanwhile, the need for a reduced gas fee and accessibility from other projects makes it necessary to introduce a second-layer upgrade on Ethereum. As a result, decentralized social media platforms such as Reddit will become assessable. But how Ethereum can be an asset or payment exchange is becoming a loud whispering in the industry.
Ether is essential to block space unlock on the mainnet regardless of the kind of applications used, whether new or old applications or transferring tokens between wallets. Ether is a native asset to the Ethereum blockchain, and it is similar to how gas is essential to a car.
After the EIP 1559 protocols launch, participants require ether to engage the digital economy. And ether will be instrumental in staking and securing the network. Due to its resourcefulness, it is now the widely used pairing on decentralized exchanges (DEXs).
What Translates to Currency in the Metaverse?
Following up on the success of Ethereum, other blockchain networks (such as Solana and Avalanche), and the Metaverse, the contextual definition of money will extend beyond the limits experienced with fiat currency today. We are witnessing the era of startups raising capital and sizing it up against ether. Likewise, ether is now the benchmark for investors to measure portfolios against dollars or stablecoins.
Although replacing fiat currency and stablecoins in this standard does disregard fiat or stablecoins. It only complements the capacity of cryptocurrency to become a standard measure and store of value in the business sphere. Likewise, this may indicate the potential of ether becoming the Metaverse’s currency.
Cryptocurrency assets such as ether obey the demand and supply mechanism in the crypto market. Their reflex is higher than that of dollars and stablecoins. As a result, they are a better investment option than other currencies. But it is noteworthy that the growth of the Ethereum ecosystem also determines the currency adoption of ether with time.
With the current run on blockchain population, it is apparent that the number of speculators is higher than blockchain users. However, the favor ether brings to the ecosystem—by being used for DeFi, NFTs, and social media, amongst other things—is changing the narrative for the entire ecosystem. This is causing a significant shift in how people and organizations use blockchain technology.
The exploding tokenization of assets and the composition of operations in DeFi applications are now creating tradable markets for assets that users could not trade before. Now, some assets are functioning as though they are money. These assets can stand as collateral, be traded against each other, or instantly transferred across borders in seconds.
Aside from the angle mentioned above, the workforce now experiences a change in the demand for the payroll system. Employees now prefer to receive their salaries or wages as token equity instead of stablecoins. This might be a result of the bull market and increased valuations. Although this doesn’t nullify employees’ genuine interest in owning projects they are working on.
What Should We Expect for Upcoming Ether’s Value?
When you critically look at the digital world, you will agree that the incentive system is now innovative for participants to earn income across boards. An example is the play-to-earn gaming industry in the crypto space. This NFT-based gaming system generates billions of dollars yearly, and users are living based on the revenue generated from these games.
This explains the kind of connection existing between the gaming industry and finance. The gap is closing in, indicating just one part of the virtual world. If this continues to be a trend in the future, there will be inclusive financial participation than before. Although we cannot determine if it is beneficial or detrimental for humanity, cryptocurrency, DeFi, and NFTs have given us insights into what is possible.
Regardless of being beneficial or detrimental, the contextual definition of money in the digital world will continue to be cloudy with the growth of the digital economy. This is a similitude of what happens with credit cards and various online payments system. These systems revolutionize the campaigns for individuals detaching from paper money.
This narration fits the Metaverse’s narrative as there is a thin line between what is real and what lives in the digital world.